The IRS’ use of correspondence audits to resolve issues with tax returns has mushroomed over the past decade—but taxpayer satisfaction with the program is fairly low. According to the Treasury Inspector General for Tax Administration (TIGTA), only 48% of those surveyed by the IRS said they were either somewhat or
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PCAOB outlines related parties proposal, other amendments
The PCAOB on Tuesday issued for public comment a proposed auditing standard on related parties and proposed amendments on significant unusual transactions. The board said the proposals are designed to improve auditors’ focus on certain areas of risk. In addition, the PCAOB proposed amendments to its rules and forms to
SEC proposes identity theft “red flags” rules to protect investors
Broker-dealers, mutual funds and other SEC-regulated entities would be required to create programs to detect and respond appropriately to identity theft red flags under an SEC rules proposal announced Tuesday and issued for public comment. The proposed rules are designed to protect investors from identity theft and are similar to
FinCEN postpones mandatory FBAR e-filing
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced that it is postponing until July 1, 2013, its requirement that Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), be filed electronically. FinCEN notes that the delay in the e-filing requirement does not relieve anyone of the
Eighth Circuit affirms S corporation shareholder’s compensation was not reasonable
The Eighth Circuit affirmed the District Court for the Southern District of Iowa’s decision that an S corporation shareholder’s $24,000 salary was not reasonable compensation and that the $91,044 salary determined by the government’s expert witness was (David E. Watson, P.C., No. 11-1589 (8th Cir. 2/21/12)). At issue is a
FinREC seeks clarity in principal vs. agent proposal
The AICPA’s Financial Reporting Executive Committee (FinREC) sent a comment letter to FASB stating concerns about operational challenges that could be triggered by Proposed Accounting Standards Update (ASU), Consolidation (Topic 810)—Principal Versus Agent Analysis. FASB issued the Proposed ASU on Nov. 3. The proposal would amend the evaluation of kick-out
President signs payroll tax cut extension bill; new Form 941 released
On Wednesday evening at the White House, President Barack Obama signed into law the Middle Class Tax Relief and Job Creation Act of 2012, H.R. 3630. On Thursday, the IRS released a revised Form 941, Employer’s Quarterly Federal Tax Return, to reflect the extended payroll tax cut. The act extends
Supreme Court: Filing a false tax return can lead to deportation
The U.S. Supreme Court issued a decision Tuesday holding that a conviction under Sec. 7206 for willfully filing a false tax return (or for aiding and abetting filing a false tax return) is an aggravated felony that can result in deportation. Kawashima v. Holder, S. Ct. Dkt. No. 10-577 (U.S.
Budget proposal includes change to treatment of intentionally defective trusts
Among the various estate tax proposals in President Barack Obama’s recently released fiscal year 2013 revenue proposals is a new plan that could alter estate planning techniques and benefits with intentionally defective grantor trusts (IDGTs); the assets in these trusts would be included in the estate of the grantor at
IFRS decision a “few” months away, based on SEC staff report timeline
An SEC decision on the use of IFRS by U.S. public companies is still a “few” months away, SEC Chief Accountant James Kroeker indicated Monday. At an IFRS Advisory Council meeting in London, Kroeker declined to get more precise because he wants the SEC staff focused on completing a report
Congress passes payroll tax cut extension
On Friday, the House of Representatives and the Senate both passed a bill that will extend the reduced 4.2% Social Security tax rate through the end of the year (The Middle Class Tax Relief and Job Creation Act of 2012, H.R. 3630). The vote was 293–132 in the House and
Round table explores investment company proposals
Questions arose about the scope and substance of accounting standards proposals on investment companies Friday during a round-table meeting sponsored by FASB and the International Accounting Standards Board (IASB). The meeting, which was held in Toronto, was the first of four public meetings to discuss the FASB and IASB proposals.
Portability election extended for some estates
Some executors who missed a deadline to apply a decedent’s unused estate and gift tax exclusion amount to a surviving spouse received an extension Friday. The IRS announced the extension in Notice 2012-21. It applies to estates of decedents dying in the first six months after provisions for “portability” of
SEC changes performance fee thresholds, net worth calculation
Investors no longer will include the value of their home in the net worth calculation that can determine whether registered investment advisers can charge them performance fees, the SEC announced Wednesday. SEC rules allow registered investment advisers to charge performance fees if the client’s assets managed by the adviser or
Three financial reporting standards to get FAF reviews
The Financial Accounting Foundation (FAF) will conduct post-implementation reviews on standards regulating financial reporting for business combinations, operating segments and investment disclosures. Standards selected for review, as announced in a FAF news release, are: FASB Statement No. 141R, Business Combinations, which requires an acquiring organization to recognize the assets acquired,
FinCEN once again extends FBAR filing deadline for certain financial professionals
The Financial Crimes Enforcement Network (FinCEN) announced a further extension of the deadline for filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), to June 30, 2013, for a small group of financial professionals (FinCEN Notice 2012-1). In 2011, FinCEN announced that three small groups of
IRS proposes PTIN regs. for supervised, nonsigning and non-1040 preparers
The IRS issued proposed regulations on Tuesday regarding the availability of preparer tax identification numbers (PTINs) for supervised nonsigning preparers and for preparers of forms other than Form 1040. They also address what tax forms are considered returns for purposes of the PTIN rules (REG-124791-11). The proposed regulations do not
Partnerships can issue Schedules K-1 electronically
The IRS issued Rev. Proc. 2012-17, which contains rules partnerships must follow if they want to supply Schedules K-1, Partner’s Share of Income, Deductions, Credits, etc., electronically. The guidance is effective Feb. 13, 2012. Failure to furnish the Schedule K-1 as required in Rev. Proc. 2012-17 can be deemed a
President’s budget proposes AMT elimination, tax reform
President Barack Obama unveiled his proposed budget for fiscal year 2013 on Monday. Included in its 256 pages are several tax reform proposals, including plans to eliminate the alternative minimum tax (AMT), to repeal LIFO, and to tax dividends of high-income taxpayers at ordinary income rates. The budget estimates that
Foreign tax credit regs. on splitter arrangements and determining who is liable for foreign tax
Late Thursday, the IRS issued final regulations on determining who has the legal liability to pay the foreign tax for foreign tax credit purposes (T.D. 9576) and temporary regulations on the application of the “anti-splitter” rules of Sec. 909 (T.D. 9577). The rules are related because the legal liability to
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From The Tax Adviser
March 31, 2026
Current developments in taxation of individuals: Part 1
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Current Developments in Taxation of Individuals: Part 1
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